Written by: Kimberly Richter

A summary of a group project carried out by Kimberly in collaboration with Lindsey Depledge, Joana Asshauer and Panuwat Sajjaviriyakul as part of their MSc Psychology of Economic Life.  

Imagine yourself in the aisles of Tesco, picking out ingredients to make your best friend a birthday cake. Whilst filling your shopping cart, you eye the sugars and the cacaos, some of which bear a FairTrade logo. As you reach for your selection, you want to do the right thing, but what ultimately influences your decision?

FairTrade, a non-profit that lifts small scale farmers out of poverty through trade, has contributed greatly to ethical consumption by pioneering a labelling system that empowers consumers to make choices that are kinder to the environment and to those involved in production. Thanks to the efforts of this organisation and others like it, public awareness around ethical consumption is at an all-time high. However, growing public awareness has failed to translate into consistent purchasing behaviour. While 89% of UK consumers report a concern for ethical issues, only 30% translate these concerns into purchasing intentions, and a mere 3% purchase ethical products.

As part of a summative project at the London School of Economics, a team of MSc candidates designed a hypothetical loyalty scheme which could support consumers who are interested in “voting with their dollar,” but who fail to regularly act on their values. When shopping among a consortium of suppliers, “Frequent Fairtrader” participants would earn and accumulate points for each purchase made. At intervals, a mobile application would deliver bundles of coupons, as well as opportunities to win high-end prizes, such as an all-expenses paid trip to a stakeholder farm. Access to a community of like-minded consumer advocates would be unlocked on the mobile platform as participants increasingly engage with the brand, in addition to access to additional educational resources.  Evidence suggests that loyalty programs effectively drive brand loyalty, increase consumer spending, decrease price sensitivity, and encourage consumers to recommend brands to their peers. In distributing coupons on the platform, participating retailers would have the opportunity to elevate the ethical appeal of their brand, access robust data on how ethical consumers spend, and advertise to new market segments.

This solution draws from literature on the intention-behaviour gap, which uses neutralisation theory to explain how individuals reconcile the dissonance between their values and actions. Neutralisation techniques can help turn off the “inner protests” experienced when behaviour conflicts with what is perceived to be right and wrong. For example, externalising guilt has been found to be an effective strategy for consumers in justifying their purchases. In effect, individuals deny responsibility for ethical consumption on the grounds that they were uninformed, that distribution and promotion of FairTrade products is inadequate, or that Fairtrade goods are too costly. Thanks to economies of scale, as well as distribution and branding partnerships with retailers such as Sainsbury’s, Waitrose, Tesco, Aldi and Lidl, Fairtrade products are more accessible than ever before. On the Frequent FairTrader platform, an interactive map would highlight the Fairtrade offerings of participating retailers in relation to the location of the customer, as well as emit a haptic signal (a phone vibration) when the participant enters a store where Fairtrade goods are sold. In highlighting the availability and increasing the affordability of the product, the Frequent Fairtrader program would work to make FairTrade products more salient to customers.

Many ethical consumers further rationalise the discrepancy between their intentions and purchases with the perspective, “it seems to me that the minority of people that care about FairTrade aren’t going to overcome big picture problems. Indeed, researchers have identified individuals’ inability to ascertain the ethical consequences of their purchasing decisions as one of the main barriers to ethical consumption. “Perceived Consumer Effectiveness”, or the extent to which you believe you can make a difference, is predictive of whether you will make an ethical purchase and how often. To cultivate a sense of agency among participants, Frequent Fairtraders would receive a tailored ‘impact receipt’ that outlines how their purchases benefit small-scale farmers and workers. These stories would be specific to the purchases made by the participant and would personify the consequences of purchasing behaviour.  By way of the Identifiable Victim Effect, which suggests that individuals are far more likely to be motivated by the observed need of one individual rather than by that of a vaguely defined group, storytelling from the field would promote a sense of pride in the Frequent Fairtrader, and provide needed feedback after each consumption occasion to reinforce the behaviour.

Lastly, the Frequent Fairtrader platform would stoke the image motivation that lives and breathes in all of us. Signalling ethical purchases to others shows that we are “the kind of person” who cares about the welfare of those engaged in production, and in turn, reinforces an identity within ourselves that is aligned with FairTrade values. Research suggests that public displays of altruism additionally amplifies feelings of “warm glow” that come from “doing the right thing”. The Frequent Fairtrader platform would leverage gamification to accelerate these effects. As consumers buy, they increase their ranking within the app’s publicly facing roster, and access more opportunities to engage with the community on and offline. The Frequent Fairtrader program would thereby serve as a public commitment device, underpinned by a combination of immediate and interval rewards. In addition to regular discounts, periodic sweepstakes would leverage the human tendency to overweight small probabilities and feel motivated by near-misses to further ratchet up participation.

Imagine a future where while piling the Fairtrade products in your cart and scanning your Frequent Fairtrader mobile app at checkout, the visibility of your purchases on the application may tip off your friend that you’re preparing a birthday surprise. Like wrapping a present with a bow, consider the narrowing the intention-behaviour gap as a part of your gift.